December 20, 2021
Aemetis signs $3.1B offtake agreement for 450M gallons of renewable diesel
Hot off the press this morning is news that Aemetis signed a 10-year offtake agreement with an industry-leading travel stop company, for 450 million gallons, or 45 million per year, from the Aemetis Riverbank Carbon Zero 1 project in California which will begin producing in 2024. The deal is expected to generate as much as $3.1B in revenue, based on current prices for renewable diesel with this low a carbon intensity, delivered into the California LCFS market. This represents half the capacity and all of the renewable diesel that will be produced at Carbon Zero 1 during its first decade.
The Aemetis Carbon Zero 1 plant in California will produce 450 million gallons of RD and 450 million gallons of SAF over the 10 years. So how does one get to $3.1 billion value? The renewable diesel price right now is as much as $7.02 per gallon in California for ultra-low carbon renewable diesel. Time will tell what the actual deal value will be over the next 10 years. The long-term deal value is dependent on carbon prices, and you can buy fossil diesel for $2.10 per gallon on the spot market right now, for illustration. Either way, it’s one of the biggest deals we’ve seen in a long time from anyone, and is the largest for Aemetis so far.
“This supply agreement represents the largest supply contract signed by Aemetis for our Riverbank Carbon Zero Plant,” said Aemetis CEO Eric McAfee. “Combined with $2.1 billion of signed sustainable aviation fuel contracts, we have now signed more than $5 billion of binding offtake contracts related to the Riverbank production facility and also have MOU’s signed with seven airlines for additional contracts.”
– The Digest, Helena Tavares Kennedy